Antitrust Law Daily Wrap Up, TOP STORY—Antitrust Lawsuit Challenges Idaho Health System’s Acquisition of Physician Practice Group, (Nov 13, 2012)
Organizations Mentioned:Duke Scanlan & Hall, PLLC | Honigman Miller Schwartz & Cohn, LLP | Risch Pisca, PLLC | St. Luke's Health System
By Jeffrey May, J.D.
A lawsuit has been filed in the federal district court in Boise, challenging an Idaho-based, not-for-profit health system's proposed acquisition of the largest and oldest physician practice in the state (Saint Alphonsus Medical Center—Nampa, Inc. v. St. Luke’s Health System, Ltd.). The transaction is the subject of a pending antitrust investigation by the FTC and Idaho Attorney General.
St. Luke’s Health System, Ltd.’s acquisition of Saltzer Medical Group will seriously and irreparably injure health care competition in Idaho and eastern Oregon, according to the 42-page complaint filed on November 12 by Boise-based Saint Alphonsus Health System, Inc. and its hospitals, as well as Treasure Valley Hospital (TVH)—a nine-bed physician-owned, short–term care, non-emergency hospital in Boise. The complaining hospitals seek an injunction blocking the transaction, as well as damages and attorney fees.
St. Luke’s owns and operates six hospitals, including a 399-bed hospital in Boise, and more than 100 outpatient centers and clinics throughout central and southwest Idaho and eastern Oregon, according to the complaint. St. Luke’s purported share of hospital inpatient hospital services in Ada and Canyon counties, which make up the Boise metropolitan area, is approximately 58%. Saint Alphonsus and TVH have an approximate 34.7% share and 0.5% share, respectively, the plaintiffs allege.
Saltzer is a physician-owned multispecialty group primarily based in Nampa, about 20 miles from Boise. It is located across the street from the Saint Alphonsus Nampa campus, and its patients are critical to the financial viability of Saint Alphonsus Nampa, according to the complaint. TVH also relies heavily on Saltzer for its cases. Saltzer purportedly employs all of the internists in Nampa, all but one of the pediatricians, and all of the rheumatologists.
The complaining hospitals contend that this most recent transaction is part of a series of hospital and physician practice acquisitions that have enabled St. Luke’s to gain a dominant position in the market. “If St. Luke’s completes its acquisition of Saltzer, it will possess a near-monopoly position in the relevant Nampa area primary care physician services market,” the complaint alleges. The complaining hospitals also allege that the transaction would increase St. Luke’s dominance in the relevant Nampa area general pediatric services market and the general acute-care services and outpatient surgery services markets in the Boise area.
The case is Case 1:12-cv-00560-CWD.
Keely E. Duke (Duke Scanlan & Hall, PLLC) and David Ettinger (Honigman Miller Schwartz and Cohn LLP) for Saint Alphonsus Health System. Jason S. Risch (Risch Pisca, PLLC) for Treasure Valley Hospital.
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